Morgan ex rel. Morgan v. American Family Mutual Insurance

Arizona law places important limitations on the reasonable expectations doctrine that apply in this case. Most importantly, the reasonable expectations doctrine does not operate as a per se bar against named-insured exclusions. State Farm Mut. Auto. Ins. Co. v. Falness (Falness I), 178 Ariz. 281, 872 P.2d 1233, 1234 (Ariz.1994) (holding that a named-insured exclusion “is not invalid on its face”). But a rigid application of this circuit’s follow up decision in State Farm Mut. Auto. Ins. Co. v. Falness (Falness II), 39 F.3d 966, 968 (9th Cir.1994), will lead to just such a per se rule.

As is…